Tag Archives: financial planning

Me and my money…what a complicated mess

12 Oct

Turns out that trying not to spend money is a whole lot easier said than done. So far I have gone off course though the money I set aside to save is still being saved and for me that is a step in the right direction. I decided against taking Dave Ramsey’s class since with my work schedule and the holidays, I know I couldn’t commit to full 13 week course which is a shame since I am sure there was something for me to learn despite having read his books.

So I am trying to be easy on myself and remind myself that Rome was not built in day but its hard because on paper I can make budgets that seem so reasonable, so doable yet the reality is shit always happens. I have tried the cash only route as well as sticking to the debit card but truthfully I have yet to find a system that works for me. I do find it works better to take cash with me when I go grocery shopping but carrying cash in general doesn’t always work.

Right now I am focusing on meeting my financial goals for the next two months which includes elder boy’s air fare for both Thanksgiving and Christmas break, paying off a couple sets of back taxes, setting aside cash for auto repairs since inspection time will be here soon and generally with a car as old as ours inevitably something needs to be fixed. There is also holiday related expenses which while we keep gift giving to a minimum and the Spousal Unit and I try not to do much for each other, our focus is on the kids and really on the little one. Lastly there is our trip to NYC to visit friends. I am also trying to stash away a few bucks to do some much needed work in the house since the wallpaper in girl child’s room needs to be replaced since it looks pretty bad.

So I have some goals and while I struggle with the occasional cup of coffee on the way home from work, I am trying to stay focused on meeting my goals. Once the year ends then we will set a new set of goals. I am sure my plans would make most financial folks cringe but I know me and after a year spent studying folks like Dave Ramsey and Suze Orman, its important for me to find a plan that is realistic to me.

So in case you cared, that’s what’s up with me and my money….besides I figured by sharing this it will help to keep me honest.

Baring my soul…my financial soul

25 Sep

I spend a lot of time talking about money and debt but I have never disclosed exactly how much debt I have, in part because it feels like a private matter. Yet as I start to get serious about wanting to clean my financial house up, I am struck by the fact that most folks who choose to do financial housekeeping generally at some point are willing to share with others the level of debt they have.

If you are a long time reader, you know that I have grappled with the idea of filing bankruptcy. It’s a lovely idea but after looking at my debt distribution, bankruptcy may not be the best idea since the bulk of my debt is not dischargable in a bankruptcy…and as far as I am concerned the idea of completely trashing my credit without complete relief does not seem like a great idea.

So drum roll…the grand total of debt that the Spousal Unit and I have is $211,310.57! Yes, that is two hundred thousand dollars and no that does not include our mortgage. Actually $113,310.57 of that is my student loans, that is for both my undergraduate and graduate degrees. The other large portion is the $66,000 that is owed in back taxes. The early years of the Spousal Unit being self employed we were not as good with the taxes as we could have been and lets just say the penalty and interest rates the IRS charges actually makes Vinny the loan shark look like a bargain and that is a understatement. You start off owing Uncle Sam $5000 and it can grow to $10,000 real fast so you have a few bad years and what was a small sum becomes really unmanageable.

The remaining $32,000 is $12,000 remaining on the hubby’s student loans and a mere $20,000 in credit card and medical debt.

So that is where I am, suffice it to say I don’t have a spare $200,000 sitting around to pay these bills off and since our income started dropping two years ago, the picture is a tad bleak at times. Right now we are planning to take Dave Ramsey’s Financial Peace class, though having read his book, I am not sure we will be able to implement all his ideas exactly to move us along but I do think its a step in the right direction.

However thanks to the fact I am lowly non-profit servant, it looks like the US Dept of Education has some options aside from being in constant deferment where I might actually be able to get my loans paid off sooner rather than later…10 years versus the current 30 year plan I am on when I am not in deferment.

As for the IRS, they too have been willing to work with us since we have worked hard to not run up more debt and since they know all about us financially they realize we have no hidden funds. The IRS actually offers settlement programs and we are exploring those options since interest rates that accrue daily don’t get them any closer to getting the money from me.

As for the remaining debts, well that $20,000 is the only amount that could be legally discharged in bankruptcy but as we get serious with our not spending plans we are hoping this is where Dave Ramsey’s advice might help us as far as starting a debt snowball.

So there it is…I have laid my financial soul bare for all the world to see. I admit knowing there are friends and associates that read my blog I am a little nervous about this but truth is I need help. I need folks to know that  I struggle with money in part because for years I could not face the fact I had a shopping habit. On some level I see my situation as similar to someone dealing with a substance abuse issue though my drug of choice is consumption. In the early years of our marriage we could have easily been saving 20-30K a year and had we been doing that we could have better weathered the financial storms that really started stirring when we moved to Maine 7 years ago and became a hurricane 2 years ago. Instead I assumed we would make more and more money and in the first 5 years of marriage amassed a lovely collection of designer clothes and other useless trinkets. At one point I was like Sarah Jessica Parker’s character from Sex and the City…broke as hell but looked great. I mortgaged our financial future to have weekly hair appointments at upscale hair salons back in Chicago.

I have come a long way, and I am proud of it but I know I have a lot more work to do, to realize I don’t have to spend money. That the temporary fix I get from that $4 coffee is just that temporary, instead saving that money to pay off creditors is a much better idea.

Now with the holidays coming up, clearly the potential to get in a jam is there but we are looking at ways to have a frugal holiday, most likely by using layaway at area stores to buy for the kiddos. The upside of not having much extended family is that we only buy for our kids and send cards to everyone else. We are also planning on visiting family and friends soon. I realize many would consider this a splurge but its important to me that my daughter know our family and since folks are willing to put us up, we can find ways to travel on the cheap.

So now that I bared my financial soul, while I have no plans to become a financial/frugality blog, I will be writing more about my struggle to manage my money. I have written a budget for Oct that looks great, things would get paid, we would be working towards our financial goals and it’s not complete deprivation…I can still have an occasional mocha at the evil empire. The thing is I have to stick with it and that’s where I am going to need some help. Its sorta the baby steps to a no-spend lifestyle.

So if you have any ideas or thoughts or want to share your own struggles with money and how you overcame it, I would love to hear from you.

Getting serious about the cash

22 Aug

I vent a lot about my financial woes here at BGIM, in part because in my day to day life outside of a small handful of folks, I really don’t discuss money at least my money or lack thereof. Granted I talk a lot about class issues especially as they relate to the middle and working class but there is a huge difference in talking class as a general topic or as it relates to my work versus a discussion about the dreary state of my finances.

For the past several years, I have watched our income slowly decline…its funny because I graduated with my masters degree in 2006 and when I started the grad school journey the plan was that our income should grow…only problem was that the Spousal Unit’s income started dropping in 2006 and in 2007 the US economy decided to thwart me and I ended up a casualty of the beginning of the recession when the school I was teaching at decided my department should be closed.

I have sat by for a few years praying and hoping that things would change instead they have only gotten worse. We made some changes to our budget since losing several thousands of dollars a month meant we had to cut back, yet through it all there was one line item that until recently I considered sacred. It was the one item I felt we could not give up. What is it? Full time childcare for the girl. Now I have mentioned over the time that my girl is high energy, I love her but I admit I have often been glad we get a break, the old saying absence make the heart grow fonder!

Well mini me aka girl child is now 4, and old enough to go to a traditional very pt preschool, its only 9 hours a week but she will still get some socializing in and I will get a few hours a week to myself. Now how is this going to work with our work schedules? Thankfully unless I am in a meeting, I can actually bring girl child to the office with me since after all, what’s in my office? Kids. At 4 she is old enough to hang out in some of the programming that is offered by my center and being the head cheese also known as the director, there is no one on site that I report to since everyone who works at the center reports to me. Definitely a good benefit.

The Spousal Unit has created a space in his office for girl child to hang out in when he is working and I am not available, also right now there are only two weeks a month that the Spousal Unit is super busy so the plan is to trade off watching her around our schedules. If I have meetings that are not when she is at preschool, he will watch her and when he is uber busy I will watch her.

I have to be honest this new plan is scary since I am not exactly a SAHM, I have a job but I also have no emergency fund and a stack of extra expenses coming up as well as some bills that need to be addressed. One of my creditors, in fact one of the most pressing ones has made me an offer and with the money saved from no longer paying for ft childcare we will be able to get this huge burden off our backs.

I admit when this idea hit me last year I eventually said no, but this year there is a sense that we no longer have the luxury of having ft childcare, not when we have work schedules that do allow for our daughter to be cared for at home.

So while I am nervous about this change, I am also excited to know we have a viable plan for changing our financial situation for the better despite not having an actual increase in salary. I am reminded that in tough financial times, sometimes we have to think out the box and look at what we really need versus what we really want. For too long I have said ft childcare was a need when for the past year its really been more of a want.

Is there anything in your budget that you think is a need but deep down you know its more of a want? If so what are you willing to change?

Finance 101 for the poor…

3 Jun

I work with the poor, I have for many years. While its emotionally rewarding work to make a difference in the lives of others, truth is I don’t make much money. Over the years many of my coworkers despite their degrees have not been much better off than the clients we serve. At one shelter I used to work at in Chicago, one of my coworkers often had to grab a bag of food from the shelves we fed folks from since he often ran short before payday.

Over the years, the only coworkers I have had who were not financially struggling were ones who were either partnered to partners who earned a good income or the do-gooders who came from well off families, otherwise folks were broke. Lets just say no one goes into social services for the money.

Regular readers know I am struggling with cash, in part I work in a low paying but rewarding field and despite the fact that I am management, I know for a fact that a management position at a burger flipping gig, would pay me more. But I love my work and thankfully when the economy picks up my side business should pick back up as well.

So with all this talk of money, I found myself sitting in a class last night on financial management. Now the class was for our clients, problem is none of our clients showed up instead those who showed up were fellow service providers. See we make no money and need help.

Problem was that the class assumed everyone was solidly middle class and merely bad at managing money and needed to rethink their relationship to money. However the supposed target audience is not middle class, these are folks who if they do work are working at minimum wage gigs, type of gigs that don’t offer any extra money.

Which leads to my vent….how come there are no financial management classes for folks with no money? Look, bulk shopping does indeed save money. I know because normally I tend to stock up and thanks to that stocking up for the last few months, I have been eating out of my deep freezer thus keeping my grocery costs down with money so tight.

Problem is now that I am running a grand short every month, stocking up is not something I can do…sort of like my clients. Yet the teacher of the class despite saying anyone can benefit from her class, had a lack of understanding about how the poor truly live.

Another example was that if you save $100 a year, in3-4 years that can turn into thousands of dollars. See eventually you can get yourself a sewing machine and sew your clothes, maybe even some crafts to sell. Buy a deep freezer, and stock up and so on.

Look, really poor people have a tendency to not only suffer from a lack of cash, in many cases they suffer from a lack of time….its easy to get a handle on your cash if the problem is you are eating too many meals out and just wasting money. Problem is for the truly poor and look while my cash is tight, even I will acknowledge I am not poor…I just feel like it. The truly poor suffer from a al around lack of resources and that includes time.

Yet as I sat in this class with my mind wandering, I found myself thinking we need former poor people (not I was a millionaire who went bankrupt and now I am wealthy folks) giving out the advice. So if you or someone you know was poor, I am talking minimum wage level of poverty and you pulled yourself up, I would love to hear your tips. I am thinking of designing a class myself for my clients and would love some input.

Off to work  I go…happy Hump Day.

PSA…Real Financial Advice

8 Apr

Several years ago when the Spousal Unit and I started to experience a decrease in our income, for the first time in my adult life I really had to get serious about tackling our finances. I am embarrassed to admit that for many years I pretty much mimicked what I had seen with my own parents when it came to money, get paid, pay your bills and if there is anything left just spend it. Yep, and I cringe in writing this but for years I never thought about what happens if???? No rainy day fund, no plans for the future just spend, spend spend. Always counting on future job growth and raises.

Early in our marriage we were netting just a hair under 6 figures and in that time saved not a dime and still managed to put things on credit cards. I know, just dumb as hell. I sometimes I wish I could go back in time for just a year, lets just say I would have a nice savings fund. Some might ask how did you get to that point? Like I said, my folks had no financial sense, we never talked money. I do recall seeing them stave off collectors and was an adult before I realized you can pay the light bill before they send the disconnect notice.

However in these rough financial times, I will say that the way I was raised (with little cash) has been helpful after all unlike my good girlfriend who just can’t imagine ever buying second hand clothes, I have no problems with yard sales, thrift shops or things like that. In fact I now prefer buying used over buying new. I get more bang for my buck and often net some unique items.

However in the past several years as I was saying, I had to start getting real serious about our finances, sadly it took a huge loss in income to get real about money. So I started surfing the net and reading folks like Dave Ramsey and Suze Orman. Now before I start I should say that I think both of them have some excellent nuggets of advice but overall I feel like they are not living where I live or where many folks are currently living. After all at the end of the day, these guys are laughing all the way to the bank on the funds they earn from us buying their products.

That said, the best thing Dave Ramsey says that I agree with is that everyone needs an emergency fund, look…I’m not talking 6 months of income put away. Yeah, that is a great goal but for many us including yours truly, that is not reality now or anytime in the future. Yet we all know situations where the car needs a minor repair or you need to call a plumber out and its a few hundred dollar expense, now maybe you can put it on the credit card and that is most certainly an option. However in this current economy you may not have that available on your card and you shouldn’t count on it being available, after all the credit card companies are reducing their lines. No, this is when an emergency fund is a great idea and really in my opinion what it is designed for.

Now if you are like me and don’t have much cash left over after paying the bills, you may be saying where the hell do I get the cash to fund this emergency fund? This is when cleaning out your house and having a yard sale or listing your stuff you don’t use on Craigslist would be a great idea. Two years ago, I made a decent sum getting rid of the kids stuff on ebay as well as my old Coach purse collection. I generated well over a thousand bucks in about 6 weeks time and while it didn’t go towards the emergency fund (I was out of work at the end of 2007) the money did go towards paying bills. So it was still worth selling shit off. Right now I am thinking of a spring yard sale and this time the cash will go towards the emergency fund, since last weeks plumbing debacle reminded me of why I need one. It was 4 days before pay day and I was running on empty thankfully a good friend was able to front me the cash till payday but its been years since I have had to borrow money and while I was thankful, truth is I don’t want to be there again.

Now other gems of advice that the financial gurus give you seems predicated on having folks who earn enough money like I used to and are just making bad choices with how to spend it. If you are like me and have been where I was until recently and simply did not have enough money to meet all the bills that’s when I find the advice these so-called gurus give to be rather lacking.

Look, the bottom line is you need food, shelter, utilities, transportation and any regular medical needs…these are what I call priority items. Lately I skim the financial boards and am amazed at the number of folks who don’t realize that if you are jobless, Visa and Mastercard are not a priority. Yeah, good credit is important but don’t pay the credit card folks to the exclusion of the folks who keep you housed. That’s just not a smart move. Suze talks alot about the important of a good FICO score, yeah it is important but if you are struggling, something has to give. Call me crazy but what good is having Visa paid but living in a cardboard box?

Also in these current times, we have to look long and hard at needs versus wants….cable TV complete with movie channels is nice, when you can afford it. However I axed premium cable a couple years ago when the going got tough and for the most part don’t miss it. Only reason we have any form of cable is that the company gave us a deal since we use them for internet. which in our case the internet is actually a legitimate business expense since the Spousal Unit needs it for work. Otherwise it would be gone.

I am an avid reader and love reading the newspaper, had home subscription..I now read it online for free. There are all sorts of small items we pay for, we consider them necessities but truth is they are not. Speaking of , I only had Starbucks one time last week, regular readers know about my battle with the Bux….better to use that money on more enriching activities.

So just a little financial advice from someone in the trenches.